LG Chem (051910) Q3 2025 earnings summary

Executive summary

• Q3 2025 saw consolidated sales of RMB 11.196 trillion (₩11,196 bn), operating profit of RMB 680 billion (₩680 bn), and net income of RMB 447 billion (₩447 bn), marking a return to profitability with an improved operating margin of 6.1% from the previous quarter.

• Profitability was driven by cost reductions, lower raw material prices, and a one-time upfront payment in Life Sciences.

• The business environment remains challenging due to weak global demand, easing of U.S. environmental regulations, and geopolitical uncertainties.

Financial highlights

• Assets at Q3-end were RMB 98.5 trillion (₩98.5 trillion), liabilities RMB 52.2 trillion, and capital RMB 46.2 trillion.

• Operating margin improved to 6.1% from the previous quarter; gross margin rose to 21.3% in Q3 2025.

• Cash and equivalents at quarter-end were ₩8,593 bn.

• EBITDA for Q3 2025 was KRW 1,992 bn, up from KRW 1,715 bn in Q2 2025.

• R&D expenses totaled ₩1.77 trillion, representing 5.1% of sales.

Outlook and guidance

• Continued weak global demand expected in Q4 and into 2026, with profitability likely to drop in Q4 due to scheduled plant turnaround.

• 2026 outlook remains cautious due to ongoing capacity additions in Asia and persistent oversupply, but focus will be on high-value-added products and cost savings.

• Advanced Materials expects demand decline to persist due to policy changes and conservative inventory management.

• New cathode shipments for Toyota to begin next year, with growth momentum expected by 2026.